The international fashion business industry looks very different from a few years ago. Online shopping was already beginning to overtake retail shopping before the Coronavirus hit. Now the playing field has changed completely. In addition to the massive shift towards online shopping, the pandemic has affected various other aspects of the industry from production, supply chain and consumer behaviour.
In this blog, we will delve deeper into the current state of the industry and trends we are seeing that will likely impact the future of fashion businesses around the world.
The fashion industry before Coronavirus
In order to differentiate between existing trends and those caused by the pandemic alone, it’s important to have a look at the fashion business pre-COVID-19.
The fashion industry had been in a state of instability for the years leading up to the pandemic, due to challenges brought on by the growth of online retail, changing consumer preferences, and competition from fast fashion retailers. Fashion business management had to rapidly adapt to changing consumer behaviour, with many brick-and-mortar stores beginning to integrate online shopping, click-and-collect and fast delivery options into their business model.
In line with the impact of digital, social media was one of the most important aspects of modern marketing for fashion businesses in Australia before the pandemic. In 2019, there were over 3.48 billion users on social media — making it an essential part of fashion houses' marketing and promotion efforts. It’s no surprise that influencer marketing for fashion businesses increased by as much as 18% between 2019 and 2020.
Another notable pre-pandemic trend was that of sustainable and fair fashion production. The signing of the G7 Fashion Pact and the UN’s Sustainable Fashion Industry Charter for Climate Action in 2019 saw key industry brands such as Gap, Nike, Adidas, H&M, and Chanel commit to reducing the industry’s contribution to climate change.
The future of the fashion business after the pandemic
With the spread of the Coronavirus in 2020 and 2021 came physical, psychological and logistical changes that impacted all industries across the globe. As many countries begin to ease restrictions and return to normal, the impact of the pandemic can still be felt today and will be affecting how businesses remain competitive. Some of the biggest factors influencing the future of the fashion businesses include:
This trend was already well underway before the pandemic hit but has been exacerbated by the COVID-19 crisis. Fashion businesses in Australia and around the world now have to compete not only with other retailers but also online marketplace giants like Amazon and eBay. In addition, the travel ban had a significant impact on the fashion industry, as designers and buyers were unable to attend fashion weeks in other countries.
However, while the online retail sector is certainly booming, retailers with brick-and-mortar stores were the biggest winners from the pandemic shopping boom. Online sales for ‘multi-channel’ retailers accounted for 7% of total retail sales in October 2020, according to the Australian Bureau of Statistics, compared to 3.3% for online-only retailers.
Furthermore, as supply chain challenges continue to cause online delivery delays, demand for physical stores is only expected to rise. Stores with strong e-commerce platforms, effective online marketing, and those with strong social media presences will be best equipped to deal with the new paradigm shift.
There is no doubt that COVID-19 has had an impact on how people dress. The data shows that the number of dresses sold during the pandemic was at a historical low. But that is not something that is new — in the years leading up to the outbreak of COVID-19, casual wear was increasing in popularity. Clothing has edged towards being more casual for years now, with the rise of casual Fridays extending to Monday through Thursday and with working from home becoming more prevalent.
In response to the gradual relaxation of social restrictions, many people have expressed enthusiasm about getting dressed up for gatherings, parties and events, and fashion businesses are responding to this newfound desire for formal attire. For example, multi-brand retailer Intermix has released an exclusive wedding edit to meet the demand in customers holding and attending weddings — the highest number since 1983.
While the coronavirus crisis was justifiably the biggest news of 2020, sustainability continues to inform the future of the fashion businesses in a post-pandemic world. Recent research from KPMG International revealed that 80% of customers now prefer to buy brands that align with their values, and 54% say an organisation’s environmental and social record has changed their purchasing decisions. Due to ongoing product and supply chain issues plaguing the industry, many fashion businesses actually reduced their carbon footprint during the pandemic.
Updating your fashion business management approach after the pandemic
The COVID-19 pandemic affected global consumer behaviour in many ways. In general, it accelerated many of the trends that were already underway, including digital transformation, sustainability and casualisation. While being aware of these trends is useful, knowing how to adapt your fashion business strategies and processes to keep up is essential in a post-pandemic world.
If you’re looking for a way to refresh your industry knowledge and gain valuable insights from professionals who have had to make crucial decisions to keep their businesses afloat during recent times of uncertainty, a fashion business course may be helpful. With various respected courses to choose from, you’re sure to find something to upskill your current repertoire or take your fashion business management to the next level at the Masters Institute of Creative Education.